Increasing parental leave and childcare incentive payments

The Emergency Ordinance no. 26/2021 which amends and supplements the Government Emergency Ordinance no. 111/2010 on leave and monthly allowances for raising children ("EO 26/2021") was published in the Official Gazette no 363 on April 8, 2021.

The newly adopted provisions are mainly aimed at encouraging the return to work of parents on parental leave and providing additional income for the payment of part of the childcare services while the parents are at work.

Given the current pandemic context and the forecast that in 2021, economic activities will resume almost entirely, it is necessary to ensure the conditions for greater participation in the labour market.

Due to the restrictions during the state of emergency and alert and the financial losses suffered, an increase is expected in the number of parents on parental leave choosing to start work earlier.

Thus, as a result of the above, parents on parental leave will receive an incentive payment of RON 1,500 increased from RON 650, if they return to work before the child turns 6 months or 1 year in the case of a disabled child. The amount is granted monthly until the child reaches the age of 2 years, or 3 years in the case of a child with disabilities.

The 650 lei monthly incentive payment is kept for parents who:

• Earn taxable income after the child reaches the age of 6 months or 1 year in the case of a child with disabilities;
• have completed the parental leave and obtain taxable income after the child reaches the age of 2 years, or 3 years in the case of a child with disabilities until the child reaches the age of 3 years, or 4 years in the case of a child with disabilities.

Another change brought in by EO 26/2021 comes to the aid of those who have benefited from the technical unemployment indemnity granted pursuant to the legislation in force in the current pandemic context.

Thus, when calculating the 12 months in which the persons benefiting from the incentive payment had to obtain taxable income according to art. 2 para. 1 of GEO no. 111/2010 on leave and monthly allowance for raising children, the period in which they benefited from the technical unemployment indemnity will also be taken into account.

Moreover, EO 26/2021 stipulates that the payment of the incentive payment will not cease if the parent who benefits from the incentive payment no longer earns taxable income. The payment is only suspended, and it will be resumed when the parent returns to earning income.

According to EO 26/2021, the employer is prohibited from dismissing the employee during the period of the payment of the incentive payment (650 RON/ 1,500 RON).

The provisions regarding dismissal do not apply in the case of dismissal for reasons that occur as a result of judicial reorganization or bankruptcy of the employer, under the law.

Within 60 days from the publication in the Official Gazette of EO 26/2021, the Methodological Norms for the application of the provisions of EO 111/2010, approved by GD no. 52/2011, with the subsequent amendments and supplements, will be amended accordingly by Government decision, and from the date of entry into force of that decision, the provisions of EO no. 26/2021 will also enter into force.